The Central Sales Tax purchases should be eligible for Value Added Tax benefits to reduce the cost for the manufacturers. Maharashtra, Gujarat and Andhra Pradesh levied VAT when cotton was removed from the State to another. However, there was no tax for depot transfer. The tax should not be levied for cotton transfer from the producing State to others.The Minimum Alternate Tax on the book profit should be 10 per cent and not 15 per cent.
In the new Direct Tax Code Bill, the proposal to charge two per cent tax on gross assets would affect companies with large asset base and do not have sufficient profits. The depreciation for plant and machinery for micro and small units should be increased to 30 per cent as these units should stay competitive in the global market. A scheme similar to the TUF for the textile industry should be introduced for the engineering sector.
The Centre should extend subsidies for roof top solar (photo voltaic) installations, solar energy use in processing units, energy management software and thermal infrared scanners used to detect energy waste, he said.